For branch churches, societies, and Christian Science associations

Branch Church, Society and Association Trusts with The Mother Church

Many Branch Churches, Societies, and Christian Science Associations have benefited by
establishing Irrevocable Trusts with The Mother Church. By creating these types of trusts, it is possible to provide for income generated by investments that are screened for their compatibility with Christian Science.

Examples of benefits include:

• A regular income for the Branch Church, Society, or Christian Science Association
• Simplicity and ease of investment management for assets. The Mother Church has broad
historical experience and ability to invest and manage trust assets effectively, carefully, and
professionally.
• The Branch Church, Society or Association’s membership continues to make a meaningful
demonstration of financial support for its activities, balanced with and supplemented by
annual income from the trust.
• While irrevocable, under certain circumstances, these trusts may allow for access to distributions from the trust principal to provide for the continuity of Association or Church activities.
• Virtually all Branch Churches, Societies and Associations set aside funds that are intended
to ultimately come to The Mother Church when they disband. The trust structure is the ideal
vehicle to support an Association or Church financially during its lifetime, but also provide
for a simple distribution process to The Mother Church at the time of disbanding. • A significant, eventual gift to The Mother Church.

We welcome inquiries from the board, clerk or treasurer of branch churches and associations at any time. Please contact us by email at philanthropy@csps.com, or by phone at 800-288-7155 ext. 3288.

Branch Church Trusts with The Mother Church

Since 1926, Church Manual-based organizations of The Mother Church, such as Christian Science Branch Churches, Societies and Associations, have established trusts with The Mother Church. Establishing a trust is a way of creating an ultimate gift to the Church, while at the same time receiving net income from the trust for use by the Church or Association during its lifetime.

Opportunity: Establishing a trust of this nature creates an opportunity for Branch Churches, Societies and Associations to provide for an ultimate gift to The Mother Church directed to either the General Fund or to The Mother Church Endowment Fund, for the future support of the Cause.

Wisdom: The Branch Church, Society or Association considering such a trust agreement should wisely plan for using only long-term assets to fund this type of trust. They should be certain that their annual and daily needs are provided for before establishing this irrevocable trust.

Irrevocable: The trust arrangements are irrevocable and cannot be amended, which emphasizes the gift nature of the arrangements. However, a special withdrawal provision has been established for Associations (see below “Payment of funds”).

Funding and asset allocation: The funding minimum for a Branch, Society or Association trust may vary depending on circumstances, but is generally $10,000 US. These types of trusts are typically invested in a growth-oriented asset allocation.

Type of trust: The trust is a net income trust, meaning that the income paid to the Branch, Society or Association on a quarterly basis will be the lesser of the net income and 5% of the fair market value of the trust as valued on the first of each calendar year.

Payment of funds: The Branch Church, Society or Association will receive the net income from the trust each year. Additionally, upon an Association Teacher’s passing, a limited annual distribution from principal will be allowed. The trust provides a simple distribution process to The Mother Church at the Branch, Society or Association’s disbanding.

Additions: Additions to the trust are possible at any time. Many Branches, Societies and Associations with this type of trust decide to reinvest the income back into the trust to grow the principal, and magnify the ultimate gift to the Church.

Payment frequency: Once the trust is established, payments are made quarterly and must be made through electronic means.

Each year the Branch, Society or Association with a trust will receive:

Quarterly account statement and notification of payment

Annual account statement

We welcome inquiries at any time. Please contact us by email at philanthropy@csps.com or by phone at 800-288-7155 ext. 3288.

1. Purpose

Branch Church Trusts have been established to meet requests from Branch Churches over the years. The requests were based on Branch Church members’ desire to both make a gift to The Mother Church, and to be relieved of the burden of investment management utilizing investments screened for their compatibility with Christian Science. In some instances Branch Churches also wanted to place a portion of their assets in a safe harbor to provide for an ultimate gift to The Mother Church, should the Branch Church ever decide to discontinue.

2. Irrevocable, no distribution of principal

Branch Church trusts are irrevocable, and generally do not permit distribution of principal. Under certain circumstances, these trusts may allow for access to distributions from the trust principal to provide for the continuity of Church activities. For this reason, it is important that a Branch Church desiring to establish a trust with The Mother Church do so only with assets that it will not need to access.

3. Established at no charge to the branch church

A Branch Church Trust may be established at no charge to the Branch Church. Should the Branch Church desire to have independent advice or review of the trust document during the process of establishing the trust, that expense would need to be born by the Branch Church.

4. Tax exempt

A Branch Church Trust is not a taxable trust. No tax returns need to be filed with the IRS for this trust. As long as the Branch Church uses the distributions from the trust for the Branch Church’s tax exempt purpose, the Branch Church may not pay taxes on the income from the Branch Church Trust.

For this reason, the issue of what is capital gain or ordinary income does not apply to a Branch Church Trust.

5. What is net income?

Branch Church trusts are net income trusts.

Net income, for this particular type of trust for tax-exempt organizations, describes a distribution of payments that are limited to the lesser of:

(a) the total of dividends and interest earned by the trust, OR

(b) the fixed percentage payout rate amount, usually 5%.

A net income arrangement is designed to protect the principal, not only for what may eventually be the remainder interest, but also to protect the income stream.

6. Income distributed net of fees

Distributions from the trust to the Branch Church are made, net of fees, on a quarterly basis.

7. What are the fees?

There are two types of fees that are charged to the principal (not the income) of the trust:

(a) Asset Management Fees. These are fees charged to the principal of the trust for investment management services. The fee is .25 (twenty five basis points)

(b) Trustee’s Service Charges: Fees charged to the principal of the trust for services provided by the Christian Science Trustees for Gifts and Endowments to cover the expenses involved in operating the trust program. The Trustees’ fee varies with the size of the trust: 1st $500,000: .65; 2nd $500,000: .55; Higher: .30.

8. What is the asset allocation?

Branch Church trusts are invested in a Growth asset allocation, 70% equities/30% fixed income. Although there is a wide array of possible asset allocations, as many may be aware from their investment experiences, the growth allocation is the one best suited to what is hoped to be a perpetual trust.

9. How is the asset allocation determined?

Asset allocations are determined as a matter of policy by the Christian Science Trustees for Gifts and Endowments, and based primarily on the horizon of the trust. The policy of the CSTGE is designed to protect the split-interest nature of the gift. Branch Church trusts are presumed to be perpetual, thereby indicating a Growth allocation. The growth allocation cannot be altered by the Branch Church.

10. A branch trust is a gift and a safe harbor

This special trust is best suited to situations where a Branch Church wants to primarily make a gift to The Mother Church, where reliance on the income stream is secondary. As a result, a Branch trust is not suited to situations where Branch Church members are looking for an investment vehicle. The growth allocation is designed to grow the size of the trust over time, thereby increasing the size of the gift to The Mother Church. With the gift in mind, Branches should fund such a trust only with assets that are above what they need to operate.

11. Your financial safe harbor: Find the right fit

Many Branch Churches who establish a trust with The Mother Church have found that the trust meets two important needs:

The desire to give a gift to The Mother Church that will increase in value over time.

The need to create a safe harbor for surplus funds.

We recognize that this type of trust may not be the right fit for every situation. We support each Branch Church’s democratic nature and their ability to manage their assets in the way that will best meet their needs.

Association Trusts with Mother Church

Since 1926, Church Manual-based organizations of The Mother Church, such as Christian Science Associations, have established trusts with The Mother Church. Establishing a trust is a way of creating an ultimate gift to the Church, while at the same time receiving net income from the trust for use by the Association during its lifetime.

Opportunity: Establishing a trust of this nature creates an opportunity for Associations to provide for an ultimate gift to The Mother Church directed to either the General Fund or to The Mother Church Endowment Fund, for the future support of the Cause.

Wisdom: The Association considering such a trust agreement should wisely plan for using only long-term assets to fund this type of trust. They should be certain that their annual and daily needs are provided for before establishing this irrevocable trust.

Irrevocable: The trust arrangements are irrevocable and cannot be amended, which emphasizes the gift nature of the arrangements. However, a special withdrawal provision has been established for Associations (see below “Payment of funds”).

Funding and asset allocation: The funding minimum for an Association trust may vary depending on circumstances. These types of trusts are typically invested in a growthoriented asset allocation.

Type of trust: The trust is a net income trust, meaning that the income paid to the Association on a quarterly basis will be the lesser of the net income and 5% of the fair market value of the trust as valued on the first of each calendar year.

Payment of funds: The Association will receive the net income from the trust each year. Additionally, there may be circumstances under which a limited annual distribution from principal may be allowed.

Additions:Additions to the trust are possible at any time. Many Associations with this type of trust decide to reinvest the income back into the trust to grow the principal, and magnify the ultimate gift to the Church.

Payment frequency: Once the trust is established, payments are made quarterly and must be made through electronic means.

Each year the Association with a trust will receive:

Quarterly account statement and notification of payment

Annual account statement

We welcome inquiries at any time. Please contact us by email at philanthropy@csps.com or by phone at 617-450-3277.

1. Purpose

Association Trusts have been established to meet requests from Associations over the years. The requests were based on Association members’ desire to both make a gift to The Mother Church, and to be relieved of the burden of investment management utilizing investments screened for their compatibility with Christian Science. In some instances Associations also wanted to place a portion of their assets in a safe harbor to provide for an ultimate gift to The Mother Church, should the Association ever decide to discontinue.

2. Irrevocable, no distribution of principal

Association trusts are irrevocable, and generally do not permit distribution of principal. Under certain circumstances, these trusts may allow for access to distributions from the trust principal to provide for the continuity of Association activities. For this reason, it is important that an Association desiring to establish a trust with The Mother Church do so only with assets that it will not need to access.

3. Established at no charge to the Association

An Association Trust may be established at no charge to the Association. Should the Association desire to have independent advice or review of the trust document during the process of establishing the trust, that expense would need to be born by the Association.

4. Tax Exempt

An Association Trust is not a taxable trust. No tax returns need to be filed with the IRS for this trust. As long as the Association uses the distributions from the trust for the Association’s tax exempt purpose, the Association may not pay taxes on the income from the Association Trust. For this reason, the issue of what is capital gain or ordinary income does not apply to an Association Trust.

5. What is net income?

Association trusts are net income trusts. Net income, for this particular type of trust for tax-exempt organizations, describes a distribution of payments that are limited to the lesser of:

(a) the total of dividends and interest earned by the trust, OR(b) the fixed percentage payout rate amount, usually 5%.

A net income arrangement is designed to protect the principal, not only for what may eventually be the remainder interest, but also to protect the income stream.

6. Income distributed net of fees

Distributions from the trust to the Association are made, net of fees, on a quarterly basis.

7. What are the fees?

There are two types of fees that are charged to the principal (not the income) of the trust:

(a) Asset Management Fees. These are fees charged to the principal of the trust for investment management services. The fee is .25 (twenty five basis points)

(b) Trustee’s Service Charges: Fees charged to the principal of the trust for services provided by the Christian Science Trustees for Gifts and Endowments to cover the expenses involved in operating the trust program. The Trustees’ fee varies with the size of the trust: 1st $500,000: .65; 2nd $500,000: .55; Higher: .30.

8. What is the asset allocation?

Association trusts are invested in a Growth asset allocation, 70% equities/30% fixed income. Although there is a wide array of possible asset allocations, as many may be aware from their investment experiences, the growth allocation is the one best suited to what is hoped to be a perpetual trust.

9. How is the asset allocation determined?

Asset allocations are determined as a matter of policy by the Christian Science Trustees for Gifts and Endowments, and based primarily on the horizon of the trust. The policy of the CSTGE is designed to protect the split-interest nature of the gift. Association trusts are presumed to be perpetual, thereby indicating a Growth allocation. The growth allocation cannot be altered by the Association.

10. An Association Trust is a gift and a safe harbor

This special trust is best suited to situations where an Association wants to primarily make a gift to The Mother Church, where reliance on the income stream is secondary. As a result, an Association trust is not suited to situations where Association members are looking for an investment vehicle. The growth allocation is designed to grow the size of the trust over time, thereby increasing the size of the gift to The Mother Church. With the gift in mind, Associations should fund such a trust only with assets that are above what they need to operate.

11. Your financial safe harbor - finding the right fit

Many Associations who establish a trust with The Mother Church have found that the trust meets two important needs:

The desire to give a gift to The Mother Church that will increase in value over time.

The need to create a safe harbor for surplus funds.

We recognize that this type of trust may not be the right fit for every situation. We support each Association’s democratic nature and their ability to manage their assets in the way that will best meet their needs.